HARD TRUTHS

OUR VOLUNTARY participation in the global economic system in which we find ourselves as a relative small player implies that, rather than trend-setting, we are effectively rule-takers. Based on 2015 figures, the country closest to our economic size within the Brics grouping is Brazil, which has about six times our GDP.

As some other analysts have put it, in the Brics formation, we are the diminutive “s”.

While the likes of China and Russia, the two major Brics economies, remain manifestly committed to global capitalism, and its workings, one wonders how South Africa, alone, can chart a completely alternate economic path that challenges the likes of S&P’s and still get away with it.

In this financial architecture, second-guessing and trying to discredit rating agencies is futile, especially at a time when we should be reflecting on what has just happened to South Africa Inc, in order to take the necessary remedial

Any attempts to act as if we can dominate the markets and become our own standard… are delusional at the least and economically suicidal.

In order to service this debt, the country incurs R169 billion per annum in interest payments. There will be a deficit of R149bn this year to finance government spending. The rating agencies’ call will have an impact on the cost of financing this deficit.

We cannot eat the proverbial cake and still want to have it. For now, any attempts to act as if we can dominate the markets and become our own standard, without submitting to the instruments of global capital markets, are delusional at the least and economically suicidal at the worst.

The unkind capitalistic global markets, so fickle and programmed to accept only a certain kind of vocabulary, tend to be viciously